Israel's Health Care Outpaces U.S.

Provides Universal Coverage and Better Outcomes, Experts Say

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By Nathan Guttman and Nathan Jeffay

Published June 28, 2012, issue of July 06, 2012.
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But HMOs were still free to turn away people who they regarded as too high-risk, so in 1995, when 4% of the population was uninsured, the government made coverage universal by passing the National Health Insurance Law. It meant that everybody had the right — and obligation — to be covered by one of the country’s four not-for-profit HMOs. Residents of the country pay from income-related contributions collected through the tax system, which cover around 40% of HMOs’ costs. The state pays the remaining 60%.

People are allowed to choose which HMO to join and are allowed to change once a year, but the differences are mostly superficial: By law they are obliged to provide a standardized “basket” of services and medicines, from emergency to preventative. Except for some consultations and tests for which the patient makes a contribution to the cost — usually less than $10 — HMOs transfer funds to clinics, health centers and hospitals to cover all services. There are only a handful of completely private hospitals.

In America, by contrast, the burden of health care insurance costs falls entirely on individuals or their workplace, except for individuals covered by Medicare, Medicaid, the Children’s Health Insurance Program and veterans’ programs, all of which are government funded. The breadth and quality of coverage Americans get for their money is highly variable depending on the plan, compared with Israel’s government-mandated standardized packages.

Proponents of America’s system often tout the virtues of competition for keeping costs low and quality high. Yet the cost to Israelis for their health care is significantly lower than that in the United States.

Israel spends slightly less than 8% of its GDP to achieve universal health care coverage, compared with 17.4% of the GDP in America for a system that leaves more than 40 million residents — one out of every eight residents — uninsured.

Moreover, under many criteria, Israeli citizens appear to be getting better care for their lower expenditures. Israel has an infant mortality rate that is only 57% of that in the United States, and a life expectancy from birth of 82 years, compared with 78 years in the United States. Its mortality rate due to heart disease is only half that of America’s. Many other indicators having to do with specific diseases are similarly favorable or, at worst, roughly equal.

“I think that America can learn a lot from the Israeli system. The quality is high, and the outcomes are good,” said Orly Manor, dean of the Hadassah-Hebrew University Braun School of Public Health.

Studies and doctors do point out that Israel lacks the specialists and care centers for rare and complicated diseases. In many cases, this requires patients to travel abroad for treatment. The expenses for some, but not all, of these treatments will be covered by the HMOs.


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